Stainless steel supplier Delong Steel shares a recent stainless steel news with you today.

Amid weak demand, measures to reduce stainless steel production are expected to become more common as stainless steel producers try to mitigate the impact of falling prices.

MEPS cut its 2023 global crude stainless steel production forecast by 800,000 tonnes from the previous quarter to 59 million tonnes, after buying activity cooled late in the first quarter and prices fell. This would represent a 6.8% increase over output in 2022.

Stainless steel producers are now exploring mechanisms that could be used to rebalance supply and demand, especially in Europe and Japan. A temporary shutdown of production has already been implemented at one EU stainless steel plant, and other stainless steel plants are expected to start maintenance outages or short-time work modes. Japanese stainless steel mills are already running well below their maximum capacity and further cuts are likely, MEPS sources said.

Eurozone manufacturing PMI has been below 50 since July 2022. The U.S. benchmark for the same has been below 50 since November 2022. Market sentiment in the US was slightly higher than in Europe. Its manufacturing purchasing managers' index rose 0.8 points to 47.1 in April. The EU figure fell 1.5 points to 45.8, while China's index fell 2.7 points to 49.2.

The MEPS forecast for EU stainless steel production in 2023 has been revised down to 6.2 million tonnes. Despite falling sharply since the end of 2022, EU energy costs remain at historically high levels. Inflation and interest rates also remain high. The German economy officially entered recession in May. These factors have negatively impacted stainless steel demand.

Against this backdrop, stainless steel inventories are running high in European supply chains. There is little interest in buying in bulk. Stainless steel distributors are trying to sell at a loss the inventory they bought in late 2022 and early 2023. Unprofitable sales have led to growing concerns about the solvency of some businesses.

South Korea's full-year forecast has been revised up to 2.13 million tonnes, although market sentiment in East Asia remains subdued. This is due to the resumption of production at POSCO's stainless steelmaking facilities, which were damaged by Typhoon Hinnamnor in September 2022.

In China, the expected pick-up in demand after the Lunar New Year holiday has so far failed to materialize. There are doubts about China's economic recovery. In 2022, the construction area of projects under construction will decrease by more than 7% year-on-year. Year-to-date, as of the end of April, that number is still down about 6% year-over-year. China's GDP is still expected to grow by 5.4% in 2023.

MEPS expects stainless steel consumption in the US to decline less than in Europe to 2023. In the first quarter of 2023, U.S. imports were down 43% year-over-year. The reduced level of competition is expected to increase demand for Chinese stainless steel.